“No Surprises Act” Rule: Physicians Lose

On September 30th, HHS released a second interim final rule (IFR) implementing the No Surprises Act. The rule specifies the independent dispute resolution (IDR) process to be used for “surprise” (i.e. Out-of-Network) reimbursement disputes. This rule applies where state laws don’t exist or lack jurisdiction.no surprises act

But the No Surprises Act rule immediately generated universal, harsh reaction from physicians and hospitals. 

  • The rule “ignores congressional intent and flies in the face of the Biden administration’s stated concerns about consolidation in the healthcare marketplace,” said Gerald Harmon, M.D., president of the American Medical Association.
  • The American College of Emergency Physicians (ACEP) said, “Emergency physicians are profoundly disappointed that the Administration’s interim final rule (IFR) is almost entirely inconsistent with Congressional intent to create a fair and unbiased process to resolve billing disputes.”

The reaction is because specific directions are given to arbiters to pick an amount closest to the “qualified payment amount” (QPA), essentially the in-network rate. 

  • The rule “essentially puts a thumb on the scale benefiting insurers against providers and will over time reduce patient access,” according to the Federation of American Hospitals.
  •  The American College of Radiology® (ACR®) “is disappointed that the regulations violate the intent of the No Surprises Act by making the Qualified Payment Amount (QPA) the primary determinant of physician payment rates in the independent dispute resolution process.”

Of course, insurance companies see it differently, praising the No Surprises Act rule for creating an “independent resolution process that focuses on affordability,” per Justine Handelman, senior vice president of the office of policy and representation for the Blue Cross Blue Shield Association, which represents 35 Blue Cross plans.

Physician organizations have joined together to oppose the No Surprises Act rule. 

  • The American College of Radiology, the American Society of Anesthesiologists, the American Association of Neurological Surgeons and the American Association of Orthopedic Surgeons have joined in opposition.
    • “Today’s rule does not follow the congressional intent in implementing the law,” Beverly Philip, MD, a Harvard Medical School professor and president of the anesthesiology society, said in a joint statement from the four groups, issued Oct. 1. “The impact will be more record profits for insurers, who are the real winners of this rule, not patients or the physicians who have put their lives on the line throughout this pandemic.”
  • The Radiology Business Management Association, Emergency Department Practice Management Association and Healthcare Business Management Association expressed severe concerns in their own joint announcement.

While lobbying and letter writing will continue, most observers think the September 30 No Surprises Act rule is likely to go into effect on January 1. As a result, physicians who are out of network will now need to prepare a compelling case about why their situation is unique to justify a higher rate than the QPA.

The ACR has pointed out the longer term risks if this rule goes forward, “If the regulations are not changed, the result may be a downward trend of in-network payment rates and/or physicians being dropped from insurer networks.”

 

No Surprises Act Background

The No Surprises Act specifies factors that can and cannot be considered by the independent arbiter. Specifically, the auditor can consider 

  • The Qualifying Payment Amount (QPA), (which was defined in the first Interim Final Rule as the median in-network rate),
  • Rates for that service in the same geographic area, 
  • The provider’s training and experience, 
  • Each party’s market share, 
  • The complexity of the patient’s case,
  • Other factors unique to the facility such as teaching hospital status and patient case mix.
  • Any bad faith efforts by either party during negotiations for participation in the health plan’s network.  

Arbiters cannot consider 

  • The “usual and customary” rate (typically higher than what insurers pay) 
  • Government payer (Medicare or Medicaid) rates, (typically lower than what commercial insurers pay).

 

Other implementation details for the No Surprises Act were spelled out in the first Interim Final Rule issued in July. See “5 Things to Know About the No Surprises Act” for more details.

References

Wall Street Journal, September 30. Medical Cost Disputes to Be Settled by Arbitrator

https://www.fiercehealthcare.com/payer/providers-cry-foul-over-new-surprise-billing-rule-s-arbitration-process 

https://www.radiologybusiness.com/topics/policy/radiologists-physicians-oppose-surprise-billing-qpa

https://www.medtechdive.com/news/doctors-slam-surprise-billing-rule-dispute-resolution-process-arbitration/607562/

AdvantEdge